Your Guide to Choosing the Right Vendor (and Why It Matters)

October 25, 2018

Your Guide to Choosing the Right Vendor (and Why It Matters)

In the business world, a lot of attention is given to finding and retaining customers. While it’s true that your business most likely wouldn’t be able to continue operating without a stream of repeat customers as well as new ones, the customer relationship isn’t the only type of relationship you should focus on. It’s also important to give some attention to the relationships you have with your vendors. Although it’s easy to look at vendors as merely “service providers” and to limit your selection criteria to cost alone, doing so can cause trouble in the long run.

If you are in the market for a new vendor, it’s important to choose one that aligns with your business and that shares similar goals. Choosing the right vendor from the beginning can be the start of a relationship that provides benefits to both parties. Here’s what to think about when picking your vendors.

Consider the Vendor’s Philosophy

Ideally, your business and the vendor’s business will share similar philosophies or have similar ideas about how things should be done. Some vendors treat every company they work with like a number. They’ll deliver the products or services you need and take your payment for them, but they won’t make of an effort to really understand who you are and what makes your business tick. Other vendors believe that it’s important to learn what makes their customers unique and do try to align their services with the specific needs of a business.

While there are times when a transactional, “provide service and leave” philosophy is appropriate, your company might be better served by a vendor who really wants to get to know it and who is going to go above and beyond when it comes to providing the best value.

Consider the Communication Style of the Vendor

Different companies have different methods of communicating with customers and different communication philosophies. If your business takes a “more is more” approach to communication, it can be a challenge to work with a vendor who is more tight-lipped or who is slow to respond to emails or phone calls.

Communication doesn’t only refer to how quickly a vendor responds to messages. It also refers to the tactics they use when replying or when sharing information with you or others from your company. If you have a question or concern, you want a vendor who’s going to give you a clear, straight answer. Some vendors tend to be more opaque. They might be hesitant to make promises that they aren’t sure they can keep or they might be willfully obscuring information so that you have less recourse to complain if things don’t go as planned.

Consider the Vendor’s Experience

It’s worth thinking about how long the vendor has been in the business and what its reputation is when you are looking for a company to work with or to provide a specific product or service to your business. Ideally, the vendor will be more experienced than anyone at your company when it comes to the service or product they offer. Otherwise, there’s no real value in hiring the company — someone at your business could handle the project themselves.

Getting outside opinions about a vendor can help you choose a company that has the experience and expertise your business needs. It’s a good idea to ask around to see if people you know can recommend a service provider. Although online reviews aren’t always reliable, they can give you a sense of how highly regarded a company is (or isn’t).

Consider the Cost

Finally, the last thing to think about when finding the right vendor is how much the company charges for its services. Often, the cost is the first consideration a business has when it’s looking for a vendor, which can lead to a company choosing a vendor that’s a poor fit in all things except for the budget.

If a vendor is perfect in every way but costs more than your company can afford, then that can be a deal breaker. But it’s better to work with a vendor that ticks all or most of the boxes you need and costs a bit more than a vendor who meets few of your requirements but has the lowest price tag.

Choosing the right team of vendors can help your business meet its goals and continue to grow. The team at New Direction Capital can help you as you work on growing your business, providing guidance on everything from choosing vendors to putting together a strategic business plan. To learn more, contact us today.

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